Water Tight 2012 – The top issues in the global water sector

May 3rd, 2012 by David Graham

Water is our most precious resource. Its availability transcends political borders. While the challenge for increased competition is global, the issues must be solved on a local level by governments, businesses, non-governmental organisations (NGOs) and domestic consumers, all working together.

The aim of this report is to highlight the top issues that the Deloitte Global Deloitte Energy and Resources Water practice regard as the most important for the water sector. These issues are of course all interconnected with each other and with other resource issues, and should not be considered in isolation.

Rapid growth in demand for for this finite resource is a central theme and is reflected in all of the issues we discuss. The global water sector’s future will be characterised by efforts to manage demand and increase supply. We thank that continued awareness campaigns, more effective water pricing, a better understanding of the relationship between water, energy and food, and technology advances will play an important role in these efforts.

Climate change is also a key theme. It increases the risk of volatility in the availability of water resources and exacerbates the impact of forces driving demand. Unpredictable weather conditions also adversely affect the functioning of water assets and make planning and investment in water infrastructure more expensive.

To meet further demand, trillions of dollars will be needed on a global level to update aging infrastructure and expand water related assets. With government funding and borrowing capabilities severely impaired as a result of the ongoing financial crisis, the private sector is likely to play a bigger role in the water industry in the future. More water suppliers may be privatised, and it may be necessary to find mechanisms that allow water to be priced as a true commodity.

Efforts to demonstrate water stewardship will be a key theme for utilities and water users in coming years. Close collaboration between utilities, regulators and all users of water is required to address the ultimate issue – the scarcity of water resources in many parts of the world.